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January 30, 2012 10:29 AM   Subscribe

FML Listings posts incredulous commentary about outrageously overpriced real estate listings in Toronto. Look at the run-down bungalows -- in North York! -- listed for a million dollars and despair. Canada's housing bubble, on full display. Via Maclean's.
posted by mcwetboy (74 comments total) 11 users marked this as a favorite

 
You guys get US newspapers up there, right? New York Times and stuff? Check out the 2007-2008 issues. You might want to sit down.
posted by theodolite at 10:39 AM on January 30, 2012 [3 favorites]


Don't worry, the banks say that it's not a housing bubble, it's just "pricey". Keep buying.
posted by smitt at 10:43 AM on January 30, 2012


My father's townhouse in Hamilton, 75km from Toronto, 3 Bedroom, basement, dining room, living room, kitchen, redone on the inside, underground parking, $220/month maintenance fees that include shoveling snow right to the door... $180 000 in a not rich but nonetheless affluent part of town.

Same place in Toronto in a comparable neighborhood, I'd say at minimum 4 times the price if not more, and much higher monthly fees. It's ridiculous.

Hamilton prices seem to be locked down from 20 years ago or so whereas the moment you step outside of Hamilton, to say Burlington, Dundas, Oakville, the prices sky rocket. Sure it's a steel town and there's not much to do but there's not much more to do in any other city outside Toronto anyway. If prices were reasonable debt wouldn't be such an issue and we'd have a lot more homeowners.

I know people who are stretched to a breaking point to live in less than 500 square feet condos here. Their situation is extremely precarious and relies on absolutely everything going perfectly well.

Still, I don't think this is going to change anytime soon.
posted by juiceCake at 10:43 AM on January 30, 2012


it appears to me that adding pot lights to your house or condo ups the value about $100,000.00

This had me thinking the condo had a closet converted to a cultivating room.
posted by exogenous at 10:44 AM on January 30, 2012 [7 favorites]


Canada is a little different than the American market. The obvious difference is that mortgages are and have been more tightly regulated than in the United States, and, presumably Ireland. The other difference is that in Canada, just a few larger cities such as Toronto, Calgary and Vancouver are receiving large numbers of immigrants (from both inside and outside Canada), and this helps boost real estate prices. On the flip side of the coin, many smaller towns in the hinterlands are dying. I often envy Americans: huge country, cheap real estate, more labour markets to choose from.
posted by KokuRyu at 10:46 AM on January 30, 2012 [2 favorites]


Listing price != sold for. There's a (nice) house across the street that's been listed at $375K for over a year. Obviously it's not worth that, and my guess is that it will sell for $300.
posted by desjardins at 10:46 AM on January 30, 2012


(I'm in Milwaukee, WI, USA)
posted by desjardins at 10:47 AM on January 30, 2012


$220/month maintenance fees that include shoveling snow right to the door

That's a weird thing to pay for. I have teenagers that shovel it away from the door for nothing except a couple of threats of taking their X-Boxes away. Maybe I should be driving them to Hamilton to make some money.
posted by Brockles at 10:47 AM on January 30, 2012 [4 favorites]


listed for a million dollars and despair

Depending on how my meds are, I can have a spare metric crap-ton of the latter. Can I make up most of the dollars with despair?
posted by Celsius1414 at 10:47 AM on January 30, 2012 [3 favorites]


Yes, but what street?
posted by bicyclefish at 10:47 AM on January 30, 2012 [1 favorite]


(I'm in Milwaukee, WI, USA)

Ah. I hear it's a great place (seriously), but it's a hike from King West.
posted by bicyclefish at 10:49 AM on January 30, 2012 [1 favorite]


Now subtract about 5% to get the value in US dollars.
posted by axiom at 10:49 AM on January 30, 2012


Hamilton prices seem to be locked down from 20 years ago or so...

Dude. We in the Hammer have a good thing going. Don't fuck it up for us. Just smile and nod whenever people talk about how terrible it is here.

posted by Capt. Renault at 10:49 AM on January 30, 2012 [9 favorites]


Vancouver prices dipped suddenly and reliably a few months ago.

Anyone with any kind of stake in the housing market was in panic mode.

Anyone who was renting wore a giant, shit-eating grin.
posted by Slackermagee at 10:51 AM on January 30, 2012 [1 favorite]


It's really too bad that the immigrant (and otherwise) influx is so heavily concentrated on the major cities. Canada is so fucking huge that the sparsity of population creates a lot of weird economics -- see cost of long distance travel by pretty much any means. There are quite a few smaller cities that could benefit from expansion and greater diversity/culture, and whose growth would aid in establishing a stronger national economy, but that most people just don't think of when deciding when to settle. Kingston and Hamilton come to mind, though I'd say even Ottawa would qualify to a certain degree.
posted by Phire at 10:52 AM on January 30, 2012


Yeah, we're trying to keep people from figuring out how great Hamilton really is!

I wish I'd moved here years earlier. It's a great city.
posted by smitt at 10:53 AM on January 30, 2012 [2 favorites]


Canada is a little different than the American market.

My parents live in Saskatchewan, and I quizzed them a while back on the rent-to-price ratio of their area. The rental prices were way below what the mortgage costs were, which seems to be a huge bubble in the making regardless of how tightly regulated the mortgages are. If people are buying "so they don't get priced out", even if no house flipping is going on, pain will follow.
posted by benzenedream at 10:54 AM on January 30, 2012 [1 favorite]


Canada's housing bubble, on full display.

Related: Vancouver's favorite website, Crack Shack or Mansion?
posted by no regrets, coyote at 10:56 AM on January 30, 2012 [3 favorites]


Toronto's housing market is partially driven by the regulatory situation on new construction. There's a "Greenbelt" around the GTA where new housing cannot be built, so we're seeing lots of infill (in the form of condos) and a market in which desirable land for new housing is artificially scarce.

This situation has upsides (breathable air, nearby agriculture, budget surpluses from development fees) and downsides (price bubbles, Toronto growing even uglier, the poor being squeezed out of the city).
posted by Pseudoephedrine at 10:58 AM on January 30, 2012


There are quite a few smaller cities that could benefit from expansion and greater diversity/culture, and whose growth would aid in establishing a stronger national economy, but that most people just don't think of when deciding when to settle. Kingston and Hamilton come to mind...

Umm, Hamilton is huge for immigration. Massive. They might not stay, but they definitely come.
posted by Capt. Renault at 10:58 AM on January 30, 2012


Man, the real Toronto story is about what has happened since many rent market regulations were jettisoned in 1995. Where's that tumblr?
posted by tapesonthefloor at 11:01 AM on January 30, 2012 [3 favorites]


My understanding is that in the U.S., you cannot buy real estate unless you are a permanent resident. Would a similar law not help to cool this insanity in Canada?
posted by not_that_epiphanius at 11:05 AM on January 30, 2012


$220/month maintenance fees that include shoveling snow right to the door

That's a weird thing to pay for. I have teenagers that shovel it away from the door for nothing except a couple of threats of taking their X-Boxes away. Maybe I should be driving them to Hamilton to make some money.


I'd pay $220 a month just to not have teenagers around.
posted by srboisvert at 11:09 AM on January 30, 2012 [2 favorites]


Brockles didn't say he'd drive them back home.
posted by seanmpuckett at 11:11 AM on January 30, 2012 [3 favorites]


I'd say I'm very happy to be living in the deeply unfashionable part of Toronto, which is right at the subway and GO train, has great restaurants, and house prices about 1/3 of the insanities listed here.
posted by scruss at 11:12 AM on January 30, 2012


I live in downtown Toronto, and you can see condos going up like mushrooms when you drive along the Gardiner Expressway into the city. I'm a big believer in density to manage the traffic congestion we face (generally considered to be among the worst in North America). But even I look at them all and think "is there really a market for all these units??"

Toronto's housing market is partially driven by the regulatory situation on new construction. There's a "Greenbelt" around the GTA where new housing cannot be built, so we're seeing lots of infill (in the form of condos) and a market in which desirable land for new housing is artificially scarce.

That's not a particularly accurate assessment of the Greenbelt's impact. The Greenbelt's main purpose is to protect disapearing farmland and headwaters that were being threatened by sprawl. York Region, to the north of Toronto, has enough land to accommodate growth and new development for all housing types (condo, single-family, etc.) for the next 25 years without even touching the Greenbelt boundary. The scarcity you speak of simply doesn't exist. The issue is that there is a general consensus that endless subdivisions aren't healthy for the GTA. Besides, infill is a way to for developers to build the exact same number of overall units, if not more, on less land, so it undercuts scarcity.

And how exactly would the Greenbelt make Toronto "even uglier"?

Man, the real Toronto story is about what has happened since many rent market regulations were jettisoned in 1995. Where's that tumblr?

Like what? There is still a provincially-mandated cap on how much you can increase the rent on an existing tenant. 3.1% in 2012 to be precise. The only thing that changed in 1995 is that landlords can set whatever rent they want on vacant units, but that regulates itself, since landlords have an interest in setting a rent that will fill the unit quickly.
posted by dry white toast at 11:23 AM on January 30, 2012


My understanding is that in the U.S., you cannot buy real estate unless you are a permanent resident.

This is not true. You'll have a hard time getting a mortgage on a temporary visa, but you can certainly buy real-estate if you have the money. However, a recent immigrant buying a house with a couple hundred thousand dollars in cash will most likely trigger all sorts of alarm bells at the IRS, FBI and DHS.
posted by rh at 11:28 AM on January 30, 2012 [2 favorites]


So why aren't all the financial people short-selling Canadian housing? If the bubble is this obvious, shouldn't market forces quickly damp it?
posted by scose at 11:32 AM on January 30, 2012


Anyone who was renting wore a giant, shit-eating grin.

Not really. Dip or no, I still can't afford a home here.
posted by Hoopo at 11:33 AM on January 30, 2012 [1 favorite]


What's the typical rental return as a percentage of the house price? Roughly 5 to 7% ($100+/week per $100,000 in the price) should be expected, assuming a capital growth component. Below that point, or if no capital growth can be expected, residential real estate compares unfavorably to bank term deposits. Above that point, you don't need capital growth to make money, which makes residential RE very favorable, which means you should get capital growth. (That is, unless something odd is going on, residential RE should return somewhat lower than the standard bank term deposit rate.)
posted by aeschenkarnos at 11:40 AM on January 30, 2012


I'd say I'm very happy to be living in the deeply unfashionable part of Toronto, which is right at the subway and GO train, has great restaurants, and house prices about 1/3 of the insanities listed here.
posted by scruss at 2:12 PM on January 30 [+] [!]

Where do you live?
posted by barney_sap at 11:45 AM on January 30, 2012


Canada's housing market has been driving me absolutely mental for the past few years. My family got their house sold just in time in a US state that has experienced massive slides from the peak and I've seen all the warning signs here for some time so I've been extremely leery, waiting for things to pop. And they haven't - not just they haven't, but they keep spiking higher! It's actually pretty worrisome, beyond me being affected personally by it; once it goes I think a lot of people are going to be in for a world of hurt.

Everyone says "oh, our banks regulated everything better here than in the US". Bull. Canada kept cutting the amount down necessary and extending the limit of amortization - once it got to 0% down, 40-year amortizations is when the housing melt in the US became pretty apparent and Canada backed down to 5%/35-year. Now it's 5%/30-year and properties acquired for investment purposes are subject to at least 20% down which put a damper on the flipping market. But plenty of people got in while it was possible to be that overextended.

It's all too common to think of "how much is my monthly payment on the mortgage going to be?" rather than "how much total debt am I taking on?". The thing is, Canada doesn't do your standard 30-year fixed mortgage like in the States. You buy a mortgage for a term - the longest standard term is 10 years, but the most common is 5 years. So you get, say, a 5-year fixed with a 30-year amortization; at the end of the 5 years you have to buy a new term for the balance on the mortgage at that point. Right now mortgage rates are super-low (historically Canada's average has been around 8% but has seen spikes up to 18%, even 20% not so very far in the past) so people calculate based on that monthly payment and quite easily buy up to the limit of what they can afford. If you break your term early, there's a penalty.

So very recently it became possible to get a 5-year fixed at 2.99% which sounds just peachy, but is actually quite cynical on the banks' part. They're predicting rates have to go up eventually (well, yes, because they've never been lower - up is the only way they can go) and then all the people calculating their monthly payment based on these low rates are going to have to reset at a higher rate. A "sizable minority" of Canadians are at risk if mortgage rates rise. And Canada's economy seems strong right now based on comparisons with the US and Europe but Canada's largest trading partner (~80% of our exports) is the US and we are not unaffected by unemployment, loss of manufacturing, or *cough* a conservative gov't that wants to cut what it can in social programs and so on when more people are very likely going to be vulnerable. But people seem complacent and think everything's going tickety-boo. I am very worried.

Back to mortgages, if you can't put 20% or more down when you buy, your mortgage is required to be insured by the CMHC - the Canadian gov't; taxpayer money. Of course the banks are happy to sell what mortgages they can - they're not going to take the hit when the bubble pops, the CMHC will. And it will probably need a bailout. Sound like the US yet? Another Globe & Mail link: Connect the housing bubble dots: There could be trouble on CMHC’s horizon

Canada's got record-high levels of household debt; Carney is clearly trying to pull us down for a soft landing without setting off a fear. But when the US economy tanked in late 2008, our housing market started to fall quite visibly - 10 to 15% before rates got pushed artificially low in March 2009. Rates went down, prices soared. Then in summer 2010, soared even higher - and crazy. Vancouver's saying it's got tons of mainland Chinese investors outbidding each other; in Toronto realtors price a house a bit low and encourage bidding wars that spike the price to insane heights over the asking - people buy without even an inspection! Canada's been pumping this game ever since and it's going to make it even uglier when it finally falls apart. Garth Turner's "Greater Fool" (book and blog) has been talking about this for years; by now he sounds like a broken record, but I don't see how this is going to end any other way.
posted by flex at 11:45 AM on January 30, 2012 [21 favorites]


never mind, I checked your profile...
posted by barney_sap at 12:04 PM on January 30, 2012


> at the end of the 5 years you have to buy a new term for the balance on the mortgage at that point

What happens if the value of the house has fallen so the Loan to Value doesn't meet the bank's requirements anymore?
posted by morganw at 12:15 PM on January 30, 2012


*Starts looking for Canadian REITs to short...*
posted by stratastar at 12:19 PM on January 30, 2012 [1 favorite]


In a similar vein, Burbed is sort of a Silicon Valley analogue.
posted by gyc at 12:25 PM on January 30, 2012


Anyone who was renting wore a giant, shit-eating grin.
Ya, Vancouver home-owner here. Didn't really see much of anything in my neighbourhood (Mount Pleasant). Admittedly, prices have been basically flat for the last 3 years, in contrast to the booming 4 or 5 years previous.
posted by WaylandSmith at 12:28 PM on January 30, 2012


What happens if the value of the house has fallen so the Loan to Value doesn't meet the bank's requirements anymore?

One finds themself in a native American water vessel on a river of excrement without any means of propulsion.
posted by Talez at 12:34 PM on January 30, 2012 [1 favorite]


The house where I was living close to scruss in that deeply unfashionable part of Toronto (Scarborough, below Eglinton) sold three months ago for close to half a million dollars for a 50 year old bungalow. Carefully renovated, and backing on to a park, but it still seemed insane to me. That was about $35,000 over asking and about $85,000 over what the homeowner had originally hoped to get for it before talking to an agent. The homeowner had a history of losing on real estate, having went west in the early 80s, so he was overjoyed to finally score.
posted by TimTypeZed at 12:47 PM on January 30, 2012


That's a weird thing to pay for. I have teenagers that shovel it away from the door for nothing except a couple of threats of taking their X-Boxes away. Maybe I should be driving them to Hamilton to make some money.

This is news to me. Maintenance contracts for condos, apartment style or townhouses, where I live are often for keeping up the grounds, repairs to the structure, keeping things clean, paying for replacement bulbs, etc.

Exploiting teenagers you don't have any right to exploit or threatening teenagers you don't have any right to threaten is not an option.
posted by juiceCake at 12:59 PM on January 30, 2012


Dude. We in the Hammer have a good thing going. Don't fuck it up for us. Just smile and nod whenever people talk about how terrible it is here.

I grew up there. It is indeed not terrible but everyone who looks at the housing costs knows about it so it's hardly a secret. Still, I'll continue to live in Toronto. The thought of living in Hamilton, Dundas, Mississauga, Brampton, Ajax, etc. doesn't appeal to me.
posted by juiceCake at 1:00 PM on January 30, 2012



Just another note, in the US, we can deduct our mortgage interest on our federal income tax. So if I'm paying $1000 a month on my mortgage just for the interest (which is about right) I get to deduct $12,000 from our total earnings and we're taxed on the remainder.


Not so in Canada.

For many, many years my owning property came down to the math of Rent-full tax rate versus Mortgage minus interest. In most cases we were able to get into a house for the same money we'd pay in rent, based on the decreased tax bill.

Now that we're upside-down in our property, it's not as cute as it once was. If you throw in expenses like lawn, garden, gutters, and assorted sewer pipe replacement, we spend more owning than we ever would renting. It would make me smile if we were building equity.
posted by Ruthless Bunny at 1:01 PM on January 30, 2012 [1 favorite]


Exploiting teenagers you don't have any right to exploit or threatening teenagers you don't have any right to threaten is not an option.

Maybe my humour filter is b0rken, or maybe it's just yours, but you do realise said teenagers live in our house, and that most of the comment was through the amusement I gained from the fact you suggested snow was swept to your door? As some kind of weird weather related house arrest service you have to pay for to have snow piled against your door in 8 foot drifts?
posted by Brockles at 1:12 PM on January 30, 2012


Canada will likely avoid a crash or serious correction in its “somewhat pricey” housing market, with the possible exception of Vancouver, says a new paper from Bank of Montreal.

Here's a link to the BMO report itself (why papers don't actually link to the reports, I'll never know): Will Canada's Housing Boom Forge On, Fizzle Out, or Flame Out? (PDF)
posted by KokuRyu at 1:18 PM on January 30, 2012


Brilliant contribution Flex. Right on the money, so to speak.

posted by peagood at 1:18 PM on January 30, 2012


Every time I'm up there, I always think that the area north of Vancouver, near Whistler, would be a fantastic place to live and/or retire. Then I took at real estate prices and swallow hard. I wonder if Whistler has gotten any cheaper since the Olympics have been over for a while.
posted by LastOfHisKind at 1:31 PM on January 30, 2012


Canada will likely avoid a crash or serious correction in its “somewhat pricey” housing market, with the possible exception of Vancouver, says a new paper from Bank of Montreal.

Mortgage market pretty much totally okay, reports massive seller and holder of mortgages. Coming up next: How many chickens are in your henhouse? A fox has a new report showing the answer may be lower than you think.
posted by Homeboy Trouble at 1:41 PM on January 30, 2012 [5 favorites]


Every time I'm up there, I always think that the area north of Vancouver, near Whistler, would be a fantastic place to live and/or retire. Then I took at real estate prices and swallow hard. I wonder if Whistler has gotten any cheaper since the Olympics have been over for a while.

You need to make a trip to Smithers. The country along Hwy 16 between Houston and Rupert is awesome, magical and mysterious. It really is BC's hidden gem.
posted by KokuRyu at 1:46 PM on January 30, 2012


Ruthless Bunny, deducting the mortgage interest looks awfully tempting -- I mean, I would absolutely love to take a significant chunk of change off my taxable income -- but I don't think it's really an overall advantage for us.

If the feds implemented this deduction, we'd have a revenue shortfall that would just have to be made up in some other way. Given the current Tory government, I think it's likely that the poorer and more vulnerable would take it in the neck. In addition, I've seen the argument that the deduction may have been one factor that encouraged so many people buying more house than they could afford. (Side note: I don't blame the housing crisis on the CRA, poor people, or any of the other targets of the Right, but a hell of a lot of people found themselves in serious financial trouble compounded by buying up to their limit -- or past it -- with the cooperation / encouragement / deception of greedy and shiftless lenders.)

If we had the mortgage deduction in place a few years ago, given we also have these short term mortgages flex described, we could have been really screwed as even more people bought way too much house.
posted by maudlin at 1:49 PM on January 30, 2012


If the feds implemented this deduction, we'd have a revenue shortfall

And in the US of A the deduction has been discussed getting rid of.

Like they got rid of the deduction of credit card fees/interest.
posted by rough ashlar at 2:01 PM on January 30, 2012


Everyone says "oh, our banks regulated everything better here than in the US". Bull.

You really have no clue. None. US and Canadian banks might as well be on separate planets.

Our banks aren't perfect but they're the best in the world. Stop catastrophising and look to the south.

You sound like every Canadian desperate to rationalise a move to the US.
posted by ethnomethodologist at 2:12 PM on January 30, 2012 [1 favorite]


Are you kidding? I'm from the US and I am so damn happy I got to come to Canada before the shit hit the fan in the US. The universal healthcare alone blows my mind. The everyday Canadian mindset was a revelation to me compared to the everyday USian mindset.

My spouse is Canadian, my children are Canadian. This is my home now. I love my new country. It breaks my heart to see so many awesome things about the Canadian way slowly morphing down the US path - especially since we've already seen how bad that path is. But what I see, and I've been here long enough to feel the change from how it was five or ten years ago, is that people here don't realize how good they have it, or how close they are to losing it.
posted by flex at 2:22 PM on January 30, 2012 [10 favorites]


What is the everyday Canadian mindset?
posted by five fresh fish at 2:56 PM on January 30, 2012


Vancouver's housing market is tough to predict because so much of it is driven by foreign investment. I keep hearing people say our real estate market is tied to China's, not Canada's, and I think there's some truth to that. One of my co-workers just made a million dollars off the sale of a house he'd owned for about eight years, because his neighbourhood was the latest to be discovered by immigrants. He used some of the money to buy a vacation house in the U.S., because it's so cheap there now….

I haven't really seen any drop in prices in my suburban hood of Langley. Quite the opposite. The asking prices of the houses coming onto market around us right now are about $50,000 more than in the fall. We'll see if they get them.

I wouldn't complain about a crash. Our mortgage is manageable, as we threw a lot of cash into the down payment and bought a house based on what we could afford if interest rates were at 10% instead of the 3.85% we have now. So we could survive a huge leap and in the meantime we're paying double our actual monthly payment each month. Sure, it would suck to have our home drop in value, but we didn't max out to buy it. And the house prices here need to correct. They're stupid, and I'm tired of seeing friends move away to live somewhere cheaper.

That said, I've seen blogs come and go saying the end is nigh for about eight years now, and the only thing that's happened is prices keep going up. It has to stop sometime, but I'm not sure what will happen when it does.

The Province newspaper, one of Vancouver's dailies (and my employer), recently did a special feature called Priced Out, about this very topic.
posted by showmethecalvino at 4:03 PM on January 30, 2012 [1 favorite]


Peace, order, good government.
posted by seanmpuckett at 4:26 PM on January 30, 2012 [2 favorites]


If you were to ask ten random Canadians if they thought that owning a house is always better than renting and being a home owner is essential no matter what your down payment or amortization term; the number answering in the affirmative would be ten.
This is known as conventional wisdom and is never ever questioned.
I know the banks started the lie to drum up business, but why is there nobody out there countering their claims?
posted by rocket88 at 4:42 PM on January 30, 2012 [1 favorite]


@rocket88: We rented for years in Vancouver, but we kept getting forced out of homes -- the owner sold one place we were in, the owners took over another place for personal use. Etc. Happened to everyone we know in Vancouver (not as common in Toronto, where I'm from). We were given notice the last time the week my wife was due with our child. That's when we said enough.

Owning is definitely more expensive than renting was, and it comes with its own set of worries (what is this property tax you speak of?). But at least I don't have to worry about being forced out of my own home. (Unless we have to default for some reason, but our mortgage is lower than any two-bedroom apartment we could rent, so....)

I don't really think owning is better than renting, or vice versa. It's all where your head is at. There's more involved than money.
posted by showmethecalvino at 4:52 PM on January 30, 2012


Its funny, I feel like we were having this same thread about the US in 2006. The US seemed in a fragile bubble at the time, but at that point, a good portion of the commentators were dismissing the possibility that house prices could drop significantly.

I moved to British Columbia in 2006 and, despite making my first post-graduate-school-real-income, I was already priced out. But since the same situation seemed to be occurring in Vancouver, I expected the same outcomes. Despite a small dip around the time of the US financial crisis, this has not occurred. Indeed, the Greater Vancouver area has gotten far more expensive. In my opinion, the biggest predictor of housing prices is the average monthly payment. As interest rates dropped to near zero (and have continued at historically unprecedented lows), people just bid up the prices. The problem is that although they might pay the same a month, the amount of debt -- real dollars that have to be repaid -- is much, much greater. If interest rates for the five year fixed go up to even a historically cheap 6 or 7% (my parents paid 18% at one point), look out.

Nowadays, I find myself in Calgary and semi-seriously looking at buying a house. Its a bit daunting. If you had told me 10 years ago that I would be shopping for a half-million dollar house in 2012, I would have been blown away. What crazy windfall lay in my future? Sadly, the truth is that this astonishing amount of debt (and the golden handcuffs such a debt would tighten) gets you a very, very modest dwelling today. I talk to colleagues in Houston who make considerably more, pay far less tax and have house prices that are half to a third of Calgary prices. But then, I would have to live in Houston, and it turns out that renting a modest little place is very un-stressful.

Perhaps I'll sit this one out, eh?
posted by bumpkin at 5:23 PM on January 30, 2012


FML
posted by crunchland at 5:51 PM on January 30, 2012


Tranna is crayzee.
posted by ovvl at 6:22 PM on January 30, 2012


Maybe my humour filter is b0rken, or maybe it's just yours, but you do realise said teenagers live in our house, and that most of the comment was through the amusement I gained from the fact you suggested snow was swept to your door? As some kind of weird weather related house arrest service you have to pay for to have snow piled against your door in 8 foot drifts?

Yes, I did indeed get that.

The mention of shoveling to door is merely because such contracts rarely include that.
posted by juiceCake at 7:05 PM on January 30, 2012


Everyone says "oh, our banks regulated everything better here than in the US". Bull.

How so? My sister was in the States for conference on just this subject and laughed aloud when an American called Canada an unregulated wasteland. She set him straight. As has been said, it's hardly perfect but I really don't expect a run on any of the 5 major banks anytime soon nor the level of gambling we've seen in recent years state side.
posted by juiceCake at 7:24 PM on January 30, 2012


dry white toast> Infill is currently making Toronto uglier by encouraging developers to throw up shitty glass box condos all over the city. Cityplace, for example, is a wasteland of condominiums.

As to the Greenbelt, I'm not opposed to it, but it is an artificial boundary on urban development. While people talk about how much space exists within its current boundaries, the actual number of lots currently zoned and ready to be developed into housing is much smaller than the area within it. Most muncipalities have additional "white belt" lands abutting it that are not suitable for development, and these additional spaces are themselves at the far edge of communities (Clarington, for example, is now prime territory for GTA developers).

The Greenbelt isn't the only reason - the terrible coverage of the TTC also forms an artificial growth boundary that drives people to want to live as close to downtown and the subway as possible to avoid having to rely on buses and streetcars. But the Greenbelt policy has certainly heated up the market for the scarce land that remains suitable for development within it. Combined with municipal, regional and provincial failures to account for scarcity (like expanding transit adequately including inter-regional transit, encouraging infill other than condo development, and subsidising or enacting rent-control on housing), it's no surprise we have a bubble.
posted by Pseudoephedrine at 8:12 PM on January 30, 2012


There are far more variables contributing to the rise in housing prices in Canada, and more specifically Toronto and Vancouver, than mere changes to provincial land regulation and CMHC-insured loans. Certainly these, along with a strong demand for commodities, an unscathed banking industry, the view that Canadian real estate is a safe haven for international investment, the safety (from crime, revolution, etc) of our metropolitan areas relative to most of the world, have contributed to such rises, but pining the rise on any one factor is simplistic.

Demographia, known for their yearly ratings of housing affordability (calculated by using median income compared to median housing price), also like to come to the distorted land market conclusion. However, their methods leave something to be desired.

First, the definition of a metropolitan area is not the same between nations. The US uses counties, Canada "CMAs", composed to census divisions (municipalities, generally). Australia, NZ, UK, I really haven't read into.

Their description of a market as "restricted" is binary: either it is or it isn't. Obviously this is not true: there is no such thing as an entirely free land market. The Kowloon Walled City perhaps came the closest, height limited by the nearby airport. There's a gradient in regulation. Certainly the Greenbelt represents a higher degree of regulation than that which exists in Atlanta or Houston, but the effect of greater land available on the fringe upon metropolitan core land prices is perhaps overstated. Further, the style of regulation is far from uniform. While Vancouver is identified as a tightly regulated market by Demographia, due to the long history of regional planning and one of North America's most successful urban containment boundary in the form the the Agricultural Land Reserve, the requirements in the core are in some respects less onerous than those in the cores of so called unregulated markets. The impact of parking on a the cost of construction, for example, is enormous. Vancouver has been successful in reducing parking requirements, a trend that is expanding to other jurisdictions (SF, DC etc), as a tool for reducing the cost of housing.

WRT condos: up until the 1970s strata ownership wasn't legal in Canada and since then private market rental construction has all but disappeared. Obviously a great deal of new private rental is of individual condo owners, but gone are the days in Canada of the apartment block. Personally I think the condos being constructed today are short sighted and geared too heavily toward the interests of development companies (like Bosa, Concord, Westbank Properties etc). The quality standards are not great and those that created the space have no responsibility to maintain the units once they are up so shoddy standards are no detriment. That's the strata corp's problem, right? Unfortunately, condos are largely the method and form of densification utilized in Canada at the moment. They're little gated communities in the sky. I'd love to see the return of the walk-up en-mass: whole neighbourhoods of 5-6 story buildings which can easily return the same density without the condo canyon.

Transportation is a whole other discussion, but in short: inaccessible land isn't worth a whole lot.

What was my point again? um. Oh yeah, land markets are complex and pinning one reason upon a rise or fall is ridiculous. But yeah, this shit is ridiculous and something has got to change.
posted by aidanwhiteley at 10:17 PM on January 30, 2012


Oh yeah, land markets are complex and pinning one reason upon a rise or fall is ridiculous.

It's a good thing no one in this discussion is doing this, then.
posted by Pseudoephedrine at 10:21 PM on January 30, 2012


Bumpkin, we're contemplating a move to Calgary this year and property prices are very similar to Vancouver. Big difference compared to Houston where we could buy a MacMansion (shudder) for the price of a 2 bedroom condo in Calgary, although at least there's not the commute from Katy.
posted by arcticseal at 3:15 AM on January 31, 2012


These look like pretty good deals as a Londoner. sigh.
posted by like_neon at 5:36 AM on January 31, 2012


I have to say that I'm no longer seriously worried about a predicted housing market collapse in Vancouver (and I'd extend that to Toronto). Vancouver to me strongly resembles the Sydney market, just 5 years behind (due to a more conservative mortgage environment) and not as overheated at peak. Just like Vancouver there have been predictions of doom for Sydney based on historical comparisons, affordability, etc. for many years; it hasn't happened yet.

The longer this cycle of forecasting disaster followed by further price increases goes on the more it looks like the forecasters just don't have the right model for these housing markets. If the cost of housing compared to family income was really the main factor here then the Sydney, Vancouver and Toronto housing markets would have collapsed years ago. In each case until there is some major new factor involved - foreign investment actively leaves Vancouver, the Oz business capital moves back to Melbourne from Sydney, etc - then I don't see a collapse (like Las Vegas in recent years, as opposed to a 5% correction) happening.
posted by N-stoff at 9:23 AM on January 31, 2012


I went down to the Gladstone for "Come up to my room" this weekend, and I was stunned by the number of condo units going up in that area: the south side of Queen from Dufferin to Ossington is nothing but construction.

Turning an established city neighbourhood into a vertical subdivision does not augur well. I can easily see these spaces being St. Jamestowns in the next 15 or 20 years.
posted by jrochest at 10:30 AM on January 31, 2012


I find the idea of talking about "Canada's housing market" as a single entity kind of ridiculous. Toronto and Vancouver skew everything off. Even Edmonton and Calgary, very similar cities in many respects, are vastly different markets when it comes to housing.
posted by Kurichina at 3:40 PM on January 31, 2012 [1 favorite]


Hamilton prices seem to be locked down from 20 years ago or so whereas the moment you step outside of Hamilton, to say Burlington, Dundas, Oakville, the prices sky rocket. Sure it's a steel town and there's not much to do but there's not much more to do in any other city outside Toronto anyway. If prices were reasonable debt wouldn't be such an issue and we'd have a lot more homeowners.

I don't know what the story is with Dundas (and I've heard that prices in Ancaster are going crazy too), but a big reason a lot of people don't want to move to Hamilton is for the commute. It's been a while since I took the GO (living and working in Oakville is pretty awesome for me), though the wife takes it into Toronto... And a lot of people are willing to sacrifice paying more for a house to take that extra time off the trip to and from work. Unfortunately, in a lot of industries, working close to home isn't really an option for Hamilton.
posted by antifuse at 9:58 AM on February 1, 2012


What industries would those be? Page 22 on this chart shows the employment breakdown by sector in the city and I don't see anything lacking. The idea that Hamilton is a steel town is about 20 or 30 years out of date.
posted by rocket88 at 12:46 PM on February 1, 2012


I'm not sure what chart you're referring to (the pdf you linked to doesn't have any charts on page 22?). But looking around in other ways - sure, percentage of jobs-wise, it seems to be broken down pretty evenly. But in NUMBER of jobs, it just doesn't compete with Toronto. Particularly when it comes to finance and banking. The last time my wife went looking for something outside of Toronto, unless she wanted to take a 50% pay cut it just wasn't happening.
posted by antifuse at 7:36 AM on February 2, 2012


Here's a pretty thorough piece out today: Canadian Bubble Trouble
posted by flex at 7:18 PM on February 23, 2012


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